It’s official: America has entered a retirement crisis. Or, as Forbes understatedly put it, “the greatest retirement crisis in the history of the world.”

And, while the causes are manifold — the demographic bulge of baby boomers leaving the fulltime workforce; greater worker longevity; the disastrous, 30-year shift from traditional defined benefit pensions to costly 401(k)-style plans — most experts agree that the national retirement implosion has gone critical, with an estimated 75 percent of Americans who are nearing retirement age having less than $27,000 in their retirement accounts.

Even John C. Bogle, the founder of the $2 trillion mutual fund and 401(k) behemoth Vanguard Group, recently admitted that the system of retirement plans that rely on 401(k)s is broken.

“[401(k)s were] designed as a thrift plan, and it doesn’t work as a retirement plan,” Bogle declared.

So it is with some irony that a Texas hedge fund billionaire/former Enron trader and a politically ambitious Northern California mayor have teamed up to cripple one of the few parts of the retirement story that still works — California’s public-sector pension system. Last month San Jose Mayor Chuck Reed filed papers with the state attorney general’s office to begin the qualification process for what Reed called the Pension Reform Act of 2014.

The measure, which was financed with a $200,000 down payment from John Arnold, the Houston billionaire and right-wing libertarian, seeks to rewrite California’s constitution to effectively empower the state and local governments to gut retirement benefits for current employees for the years of work they perform after the changes go into effect, should the measure pass.

Reed and his billionaire backers (including Silicon Valley venture capitalist Michael Moritz) will have to move quickly, however, if they want to make their claims stick about the “unfunded liability” of California’s public pension structure. According to the California Public Employees’ Retirement System (CalPERS), the system was 101 percent funded before the 2008 crash and is today well on its way to a full rebound, even during this sluggish recovery.

The new ballot initiative’s dry run came last year when Reed persuaded 69 percent of San Jose voters to pass Measure B, his municipal pension-cutting measure that forces city workers to cough up an additional 16 percent of their take-home pay into their pensions while paring benefits for new hires — or it will, if the measure can survive a gauntlet of lawsuits challenging its constitutionality.

If Measure B is any indicator, and if Reed’s new effort qualifies for next year’s ballot, California voters can look forward to a barrage of claims from Reed’s anti-pension forces who will employ his voter-tested mix of statistics, distorted bookkeeping and exaggerationabout the prodigal lifestyles enjoyed by public pensioners, and the unsustainability of such taxpayer largesse.

These campaign strategies include cherry-picking the six-figure retirement compensation packages of top-tier city and county executives to create poster children for “skyrocketing pension costs.” Yet according to CalPERS, the average pension for state workers is about $25,000 per year and that half of CalPERS retirees receive $18,000 per year or less in benefits.

While Reed and company aren’t explicitly articulating their vision of how the Golden State’s public retirees are supposed to survive on less during their golden years, Frying Pan News recently spoke with some former state, county and municipal workers for a picture of how their retirements have been living up to their expectations.

Norma Anders, Long Beach

Retired career librarian Norma Anders’ eyes light up when she speaks of her 30 years in the City of Los Angeles’ public library system. “We make a big difference,” she declares proudly. “We’re one of the forces that’s giving our country an educated workforce, an informed citizenry. [It’s how] we’re going to be able to keep our [nation] growing and growing.”

Norma Anders (Photo: Bill Raden)

Anders is having her morning tea in the well-manicured front yard of the modest clapboard house she shares with her retired husband, David, and her son Lee, who has moved back home while he finishes an accounting degree at Long Beach State. A small, exuberant and cherubic woman of 72, Anders, but for her still-strawberry-blonde hair, is almost the storybook picture of the kindly old grandmother from “Little Red Riding Hood.”

But the wolves that have been showing up at her door are of a breed never dreamed of by the Brothers Grimm.

“Ends don’t meet,” she says flatly. “Our pensions are not keeping up with the cost of living . . . We’re always struggling to keep up with inflation.”

So nearly a decade after retiring, Anders found herself returning to work as a substitute librarian. She isn’t alone. “Every retired librarian I know has returned to substitute work, because the pension we thought would be adequate is not,” she says. “So we go back because it’s not stretching. We go back to help our families. Single moms have never quit. They’ve retired and then went to work as a sub and are still doing so, even though they retired in 2003 or 2004.”

Anders is more fortunate than many. Her gross annual pension is a tidy $49,000, and her husband Dave, who worked for L.A.’s Department of Water and Power, also draws a retirement income.

“At least we have a pension,” she says. “[But] Instead of helping us stay even kind of stable, it is inadequate to maintain where we were before we retired.”

Working in her 70s is a far cry from how Anders pictured the retired life.

“I imagined I’d be doing all these wonderful things,” she says, “including some travelling. I imagined we’d have a motorhome, so we could see the United States together . . . We didn’t travel much during our working years. But I always imagined I would be doing that, and I imagined that we would be able to afford to do that. And that wasn’t true. That did not come true at all.”

The shock of retirement came from routine expenses that she had taken for granted when she and her husband were both working.

“One of the things with retirement,” Anders says, “is you don’t set aside enough to be able to replace your vehicles. So my van is a 2003. David’s is 1999, I think. A little Ford Focus. Lee has a small Ford Ranger, and he just had to have $2,000 of work. I just had to have $700 done. So those are really serious bills, those repair bills that come around.”

Her biggest fear, however, remains her health and stamina.

“How long can I keep doing this before my body gives out?” she wonders. Her goal is to rack up the 40 calendar quarters of employment she needs to qualify for free Medicare. (As city workers, neither she nor her husband paid into Medicare or Social Security.) “Despite rumors to the contrary,” she says, “librarians are on their feet all the time they’re working. I’m 72 — my little body isn’t 40 anymore.”

Jesse Espinoza, Sacramento

Like his father before him, 68-year-old Jesse Espinoza has worked hard all his life. Partly, that’s because he’s had to. Married three times and divorced twice, Espinoza had six kids and three wives to support.

And over that lifetime, he’s mastered a dazzling variety of skills. Need a concrete driveway poured? You called Jesse. Need your house rewired or your kitchen remodeled or your bathroom re-plumbed? Jesse was your man. The same went for upholstery (cars or couches), custom-designed furniture or even welding.

But by the time Jesse was in his mid-50s, it finally sunk in that there might come a day when he couldn’t keep up his physically punishing pace. So in 1999, he jumped at the chance to apply for a position with the state of California. After camping out overnight at a CalWORKS skills center, he got a job as a field maintenance worker for the Sacramento Employment and Training Agency (SETA), which administers the local Head Start program.

And for the next decade, he did his part to keep SETA’s 43 school buildings in good working order. But by 2009 the years and an accident had taken their toll on his legs, so he opted for retirement at 64. “[Working became] kind of hard,” he recalls, “because I had to carry backpacks, and I did a lot of walking and stuff. And [my legs] kind of started to bother me, you know?”

The other reason he took retirement, Espinoza admits, was to spend quality time with his grandkids, get in a little fishing on the Sacramento River and pursue his dream of designing and building fine furniture. In fact, his idea of rest and relaxation continues to be slipping out to his garage workshop and building whatever his current backyard construction project happens to be.

“I’ve always been a designer since I was a little kid,” he says. “I have my own style. That’s what people are looking for.”

But four years after leaving SETA, retirement hasn’t turned out quite as he expected. Despite a monthly pension check of $850 and an additional $1,100 from Social Security, Espinoza says that it’s a struggle just to make certain his health insurance premium gets paid.

“What’s so strange is that I retired and I had these goals and it didn’t happen,” he says. “And when you have all these bills and stuff coming at you, it just kinda takes all that away from you. So basically what I’m doing is working and trying to catch up with those bills.”

Which is why Espinoza recently returned to SETA as an independent contractor, filling in for vacationing or sick workers. That’s when he isn’t taking on some remodeling work to make ends meet.

And that quality time he imagined spending with his grandkids as a retiree? It turns out to be taking them along on a job.

“I had my grandson with me last Saturday,” Espinoza recalls. “Because I used to like to take him fishing or something. And I had him work with me for the whole day. I showed him how to rip out a whole floor, how to replace all the bad wood, and how to put tile on there. And he really enjoyed it. And I told him, I said, ‘You’re going to learn something big that you’re never going to forget.’”

Patricia Everetts, Concord

When Patricia Everetts moved to the Bay Area in 1985 and landed a job with the Contra Costa County Superior Court as an account clerk, she thought she had hit the jackpot as far as providing for her family and her retirement security went. Her husband had recently died, and at age 47 she found herself supporting a disabled son and a grandson.

“I felt that by going into government I would have more of an opportunity to have a better retirement,” she says. “Because I did have some medical problems. And so I thought that it was secure and that I could retire from the courts and make a decent retirement.”

So for 18 years Everetts went to work auditing the administration and bookkeeping departments of Contra Costa’s courthouses, eventually working her way up to the position of grant accountant. She bought a house in Concord and life was good.

But a heart condition eventually caught up with Everetts (she’s had four stents and is about to get her third pacemaker), so in 2003 she was forced to take retirement at age 62.

Everetts quickly discovered, however, that even with the $1,400 a month she gets from Social Security, her $1,680 monthly state pension check meant that she and her family were going to have to do without. Beginning with her house, which she was forced to let go. And paying bills on time. And eating out. Or sometimes even eating at all.

“I never thought, when I was working, that I’d see the day that I couldn’t afford to pay the basics,” she says with frustration. “I have friends who go to the food bank sometimes and get us food. Just the basic necessities. Sometimes I’ve had to ask for assistance in paying my utilities. And that’s the hardest part — having to go to somebody and say, ‘I really can’t pay this. Can I apply and get a lower rate for my utilities?’ Sometimes they do that, sometimes they don’t.”

Not that Everetts ever imagined retirement was going to allow her to live as large as when she was working. But she did think she’d be able to afford her retirement dream of taking trips back to the Midwest to visit family or to splurge on an occasional evening of theater or a movie and a dinner in San Francisco.

Instead, her retirement travels have been more local. “Once in a while,” she admits, “I’ll take a day trip some place on the bus through the senior center — that’s like $36. I don’t go to movies. We very seldom ever go out to eat. I do play canasta, because it only costs me a dollar-and-a-half . . . You know, I don’t do a lot.”

She worries that California’s retired public workers are seen as having life too easy.

“The most anxiety is that they might cut Social Security,” Everetts says. “I know some of the stuff that they say is for the new people coming up, but there’s so much propaganda about it that you’re not sure.”

Bill Raden is a freelance Los Angeles writer. Gary Cohn is a Pulitzer Prize-winning journalist who has worked for the Los Angeles Times, Baltimore Sun and Philadelphia Inquirer, and writes currently for Frying Pan News.

12 Responses to My Body Isn’t 40 Anymore: Three Faces of Retirement

This should make every American angry. What a disgrace that American life betrays elders who worked hard for years and now battle to survive with dignity on so little- meanwhile, battling evil political forces that distract from the !% takers and the jealous have-nothings. We need to ransack the rich and throw out all the dirty politicians.

And by that, I mean, when you were passing the New Deal or the Great Society, there were winners and losers. But the losers felt part of a larger collective and they said, OK, I’m going to take a hit for the team.

These are important stories to tell. I have friends experiencing similar financial difficulties in their elder years… after years of working hard but still just barely getting by. The “lucky” ones are those like the librarian who continues to work into her 70s (and maybe into her 80s). Puts food on her table.

This is the lot of many seniors, including those with both a public service pension & SS. These are the Seniors who are portrayed as Greedy Granny selfishly “stealing” SS from her grand kids.

Sad & too true. Good post. That creep from San Jose is a true menace & a real worry. Hope his evil plans fail.

Why are there plenty of resources to buy 85 billion worth of toxic assets from bankers per month when hard working Americans go hungry?
The American Dream is a myth.
I fell for it as many others did.
After 40 years of physical labor, the body doesn’t work so well. My mind is clear, though, and I hope to live long enough to see justice served.
The anger is truly building and if they think we will go gently in the night, their in for a rude awakening.

“[401(k)s were] designed as a thrift plan, and it doesn’t work as a retirement plan,” Bogle declared.

isn’t it grand when greedheads matter of factly admit after the fact that the F’ed everyone. Of course at the time of selling their scam they invest all kinds of money and effort denying and distracting from the obvious disastrous outcomes for all but them of their scams.

public pension “reforms” plans are just a backdoor to allow Wall st to steal pensions. John Bogle has been saying for years 401k plans are not retirement plans and he has gone to Congress many times to talk about the need to get greed out of 401k management and to put the worker’s needs first. I don’t what he thinks about public pensions. I work in Corporate America and I do have very small pension coming to me when I hit 65 (4 years away)of about 600 to 700 per month. Everything else is 401k /IRA and SS. I got my 401k nearly wiped out in 2008 so I am way behind

Americans who are broke in retirement can be greeters at Walmart and watch football when they’re not working. That ought to keep them happy. They can blame Obama too. That should add to the satisfaction; he’s black after all.

What’s going on in California is just a natural outcome of the real problem, which has nothing to do with retirement. The problem is wealth concentration, particularly the combination of stagnating wages and rising prices. When Democrats support policies that entrench class divisions and create stressful, low-wage, temporary, no-benefit jobs, all while bailing out wealthy criminals and creating asset bubbles in everything from housing to healthcare to higher education, over time public sector employees with pensions end up looking relatively wealthy.

Take the Patricia Everetts story. It’s heartbreaking when people have challenges. But she’s bringing home $37K a year in retirement. That’s more money than most people who are working bring home. If you are unfamiliar with wages in the US, let that sink in. She is struggling on more money than most workers make working.

Plus, what was the job the government had her doing? Working in the courts. Our justice system is way too big, from the criminal prosecutions in the drug war to small-time traffic matters like red light cameras. California was one of the early states pushing drug laws half a century ago. Where were the criminal justice employees over the past few decades saying hey, wait a minute, it’s hurting our economy to lock up all of these people? Keeping their mouths shut, because no one wants to be the nail sticking up that gets hammered down, the passenger rocking the boat, etc. Why risk the mortgage and food when the system is working so great for you?

These are legitimate choices that millions of Americans have made over the years, but at the same time, these are the chickens that are coming home to roost. Our system has been extremely unfair, squandering massive amounts of resources through malinvestment and authoritarianism. That’s the challenge we face, not baby boomer demographics or longer life spans or GOP crazies attacking public pensions.

Take the Patricia Everetts story… she’s bringing home $37K a year in retirement. That’s more money than most people who are working bring home.

That’s true. Part of the issue, though, is where Ms. Everetts lives bc CA has become so expensive. I do have friends who are in the process of deciding where to move bc it’s too expensive to live in most of CA upon retirement. Ms. Everett’s money may not stretch as far as it would in other parts of the country. Should Ms. Everetts move, then? Maybe. But there’s a host of considerations to contend with, some of which may be health care related, as she apparently has a disabled son. She may not be able to move.

It does show how hard it is to get by these days, however.

You make some other good points about how taxes can be used and/or abused/wasted. Taxes, though, aren’t wasted on most people’s pensions, and that’s for sure.

What happens is that citizens are told about some of the abuses of the public pension systems – and they happen for sure. Whereby some people do end up with these six figure pensions at taxpayers’ expense. I don’t like that, either, as it’s not fair.

That said, the bulk of public service pensions are mostly in line with the three stories told here in this post. “Regular” workers, who end up with a pension that *should* in theory be “enough,” but given the high cost of living anymore are not really stretching far enough to cover the basics.

These people took lower wage jobs – back in the day – with the promise of a pension out the “back door.” The 1% pits the 49% against the 50% – trying to make it seem like those on public service pensions are getting “something for nothing” and making it seem “unfair.”

This just highlights how hard it is to get by, even with pensions.

Yes, we definitely have a lot of challenges to face and hard decisions to make. I agree with you about the Criminal Justice system, btw. It’s a racket.

Everett’s circumstances are understandable if you pay attention to what she said. She lost her husband, had to raise a child on one income and had to retire early. It is unlikely she finished paying for her house before retiring early, and when her only income is a pension, how can she both pay and mortgage, and, the real killer, property taxes?

As onitgoes says, what these cases show is more the absurdly out of control cost of living in some parts of the US. Even without a mortgage left to pay, property taxes can wipe out most of a retirement income. So you are forced out of your home. Moving when forced is often a money loser. Beyond that, grocery prices are absurd in the US. Absolutely absurd. When I moved there in 2002 from europe, a long time back, I remember the sticker shock of the prices in the supermarkets. I couldn’t believe my eyes. It has certainly got much worse since I left in 2005. On top of that, as public services are essentially non-existent for many things, people are confronted with expensive private services and exhorbitant fees for many necessities. Craftsmen (if they even exist at all) are absurdly expensive. Insurance bills are double or triple what you pay in europe, for almost any kind of insurance you care to mention. And the coverage is dismal by comparison, with maximum liabilities set at 1/10th the equivalent european levels.

Welcome to FDL

Sign in with Facebook or Google+

OR use your MyFDL username

Toolbox

MyFDL is Firedoglake's community site. Anyone can participate by commenting on posts or joining groups to find other people in your area. Content posted to MyFDL is the opinion of the author alone, and should not be attributed to Firedoglake.